Page 9 - Building a Treasury Centre for Sustainable Growth

Business Objectives

The location should align with the strategic expansion plan and business objectives. Although
Malaysia and Thailand also offer tax incentives for the setting up of treasury functions, the pre-
existing controls on foreign exchange and fund transfers may have additional barriers to the
management of treasury activities. Therefore, we shall only focus on Singapore and Hong Kong
SAR tax incentives.

The tax regime of Singapore and Hong Kong SAR are equally competitive. With its proximity
to Mainland China, Hong Kong SAR is a premier location for multinational corporations (MNCs)
looking to expand into Mainland China and Mainland China corporations looking to venture
overseas. Singapore’s competitive advantage lies in its extensive ASEAN networks and tax
treaties. Corporations looking to expand into ASEAN or South Asian countries might prefer
Singapore over Hong Kong SAR.

1. Strong economic links with other ASEAN countries

2. Political stability
3. Partnership with global banks
4. Extensive double taxation agreements

1. Strong economic links to Mainland China
2. Largest RMB offshore centre
3. Access to Greater China market

4. Over 60% of Mainland China’s FDI was made via Hong Kong SAR in 2018

Synergy with Operations

Companies prefer to set up Regional Treasury Centres (RTCs) closer to their other operations for
cost-efficiency and better control and more accurate forecast of cash and treasury needs.
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Building a Treasury Centre for Sustainable Growth 7